The Bank of England (BoE) has joined other Central Banks around the globe launching targeted research into the potential use of a Central Bank Digital Currency (CBDC).
The BoE said it has opened an application based on a proof of concept for a sample wallet for its proposed CBDC, the Digital Pound. The application has commenced and will close on December 23, while January 23 has been set as the latest date to start the project.
The project has a budget of 200,000 Pounds inclusive of VAT for a 5-month period that can be extended by one month. According to the BoE, the project is expected to benefit both the bank and the private sector by investigating end-to-end user journeys to fine-tune functional requirements.
As part of the project, the bank may create regulations for CBDC wallet providers in the private sector in addition to enabling fundamental CBDC operations through its ledger and API. The bank will however be exempted from creating its own user wallet.
The project will also assist future research exploration of additional functionality that is beyond the scope of this document, such as offline payments or KYC processes for new users.
A Wallet mobile applications for Android and iOS users, as well as a Wallet website and an e-commerce website, are among the project’s key objectives.
Buyers will also require basic skills and experience such as 1% experience with mobile application development and demonstrate 1% expertise supporting user experience design, while suppliers will be asked to provide a well-articulated proposal.
The Bank of England Tests for CBDC
The launch of an application for a CBDC wallet ‘Proof of Concept’ by the Bank of England is one of its efforts towards becoming relevant in a digitally prepared economy.
The Bank of England announced in November the steps it is taking to investigate the potential use of a digital currency in the UK.
The BOE expects that a 2022 Consultation followed by a technical specification test will be conducted that will help the authorities decide whether to enter a ‘development’ phase that will last several years.
The sample wallet project is also related to Project Rosalind, which is being directed by the Innovation Hub’s London Center in collaboration with the Bank of England which aims to create application programming interface prototypes.
In related news, the State Bank of Pakistan makes arrangements to start the issuance of a CBDC in 2025.
